Famous crypto investor and author Paul Baron praises JPMorgan’s crypto-assisted loan initiative as a key test of XRP’s legitimacy as a collateral asset.
Today, the leading media outlet Financial Times reported that JPMorgan Chase, which boasts a $4.3 trillion AUM, is planning to provide crypto-assisted loans.
According to insiders, JPMorgan will allow users to borrow Fiat currency against crypto-holdings. The initiative is likely to be announced in 2026, allowing JPMorgan Chase customers to acquire Fiat loans using crypto assets such as Bitcoin, Ethereum and XRP.
Because of the context, banks have previously avoided lending to cryptocurrency due to the unstable nature of these assets. Instead, they only accepted stable assets such as real estate as collateral.
As JPMorgan is considering backing loans with crypto collateral, there is a major change in how traditional financial institutions view cryptocurrencies such as XRP.
“When the world’s largest banks recognize the value of Crypto as a support for loans, we are witnessing the bridge between the world of Tradfi (traditional finance) and Defi (decentralized finance),” Baron said.
XRP support loan
It is worth mentioning that XRP was previously used as collateral for obtaining loans. Earlier this year, popular wealth management company Digital Wealth Partner (DWP) revealed that it had completed a seven-figure loan backed by XRP.
Under the DWP initiative, XRP holders can unlock liquidity by using tokens as collateral rather than selling them.
Following Donald Trump’s inauguration as the 47th US President, financial and government agencies have changed the way cryptocurrencies are treated.
As previously reported, the Federal Housing Finance Agency (FHFA) has directed that cryptocurrencies such as XRP should be considered when assessing borrowers’ financial strength during the mortgage application process.
The federal agency issued the directive to two government-sponsored companies, Fannie Mae and Freddie Mac. The directive aligns with Trump’s goal of positioning the United States as a leader in the global cryptocurrency market.
Meanwhile, JPMorgan threw its weight behind Crypto, despite CEO Jamie Dimon remaining skeptical about the assets. The bank serves leading cryptocurrency entities, including San Francisco-based cryptocurrency exchange Coinbase, leveraging blockchain technology for global payments.
In June, Bloomberg reported that it was planning to ensure JPMorgan could secure loans with Bitcoin ETFs. The Financial Times suggests that JPMorgan can accept other crypto assets such as Bitcoin, Ethereum and XRP as collateral for loans.
